A twice-weekly syndicated newspaper column on California public affairs.

Friday, May 25, 2018

TWO-YEAR WAIT FOR CHANCE AT REAL PROPOSITION 13 CHANGE

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 12, 2018, OR
THEREAFTER

BY THOMAS D. ELIAS

“TWO-YEAR WAIT
CHANCE AT REAL PROPOSITION 13 CHANGE”

No law
is more important to lifestyles in California than Proposition 13, the landmark
1978 law that limits property taxes to 1 percent of their 1975 values or 1
percent of their latest sale prices, with only very small annual increases.

Now
homeowners, renters and business owners alike can rest assured it will be at
least two more years before there’s any meaningful change in the 40-year-old
law, which passed with a 63 percent majority.

Proposition
13 is the reason senior citizens who have held onto their homes for decades can
stay put if they like, not worrying about taxes escalating right along with
their property values. It’s one thing – maybe the only thing – keeping rents
from rising to completely unaffordable levels. And it’s the main element
keeping California taxes from topping the national rankings.

Because of those wide
financial implications, Proposition 13 may be a key to many elements of life in
California.

But
there have always been two fundamental inequities built into this law: One is
the fact that property taxes remain almost stable as long as an owner holds
onto a home or piece of commercial property, changing only when that property
is sold. This means newer buyers pay far higher taxes for nearly identical
assets. The second is the requirement that residential and commercial properties
be taxed at the same rates.

Advocates
of more funding for public schools and other local services have long contended
this second rule means Proposition 13 keeps businesses from paying their proper
share of those costs, even though business property tax revenue has risen at a
similar pace to what’s levied on residences.

The
idea of a “split roll” taxing commercial property more than living quarters
arose within less than two years of Proposition 13’s passage. But the idea
never went anywhere much and there has been no vote on it outside obscure
legislative committees.

But a
split roll initiative is circulating right now, with sponsors in the School and
Communities First Coalition including the California League of Women Voters.
But that group has reportedly cut the fee it pays petition circulators for
valid voter signatures from $3 to $2, probably assuring they won’t gather the
needed 585,407 names until after the deadline for reaching this November’s
general election ballot.

So a
vote on this key Proposition 13 change won’t happen until November 2020, in an
election expected to draw very heavy turnouts at least in part because today’s
presumption is that President Trump will be up for reelection.

A large
vote, expected to be predominantly Democratic in California, would up the
prospects for passage of a measure that’s perceived in many quarters as
anti-business.

Few
doubt it would raise somewhere between $6 billion and $10 billion in new
property taxes for schools and local governments at a time when many face
struggles with pension-driven deficits or their prospect.

But
there will still be some Proposition 13 action this year. California realtors
have placed a measure on the November ballot allowing over-55 citizens to move
anywhere in the state and keep their current tax level if they buy a new home
for the same or a lower price than what they’re selling. There’s also a formula
keeping property taxes down for them if they buy something more expensive.

Seniors
can already do most of this within some counties, but not all.

But
this would be a fairly minor change for Proposition 13, while a split-roll
would be major surgery. The split-roll attempt is spurred at least in part by a
2015 survey of 104,000 likely voters which found 75 percent in favor of
withdrawing Proposition 13 protections from non-residential property.

Business
groups led by the state’s Chamber of Commerce and the Howard Jarvis Taxpayers
Assn. (named for the co-author of Proposition 13) will surely fight strongly
against that change.

As Joel
Fox, former Jarvis association chief, wrote the other day, “The business
community will know the wolf is coming and will act accordingly.”

Together
with Trump’s presence on the ballot, that could make 2020 the most exciting election
year California has seen in decades.

-30-
Email
Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough:
The Most Promising Cancer Treatment and the Government’s Campaign to Squelch
It," is now available in a soft cover fourth edition. For more Elias
columns, go to www.californiafocus.net

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About Me

Thomas Elias writes the syndicated California Focus column, appearing twice weekly in 88 newspapers around California, with circulation over 2.2 million.
He has won numerous awards from organizations like the National Headliners Club, the California Newspaper Publishers Association, the Los Angeles Press Club, and the California Taxpayers Association. He has been nominated three times for the Pulitzer Prize in distinguished commentary.
Elias is the author of two books, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It" (now in its third edition; also published in Japanese and recently optioned for a television movie) and "The Simpson Trial in Black and White," co-authored with the late Dennis Schatzman.